S&P Cuts Lebanon Debt Rating, Warns Further Cut Possible
Sumaira FH 1 month ago Sat 22nd February 2020 | 09:10 AM
Washington, (UrduPoint / Pakistan Point News - 22nd Feb, 2020 ) :Credit ratings agency S&P lowered Lebanon's debt grade a notch on Friday, but warned a further cut is possible should the government miss a payment to creditors.
S&P Global Ratings lowered the sovereign credit rating to CC from CCC with a negative outlook, the agency said in a statement.
"We are lowering our ratings because we believe restructuring or nonpayment of Lebanon's government debt is virtually certain, regardless of the specific time to default," S&P said in a statement, citing "severe fiscal, external, and political pressures." The rating could be cut further to selective default or 'SD,' "if the government signals that it will undertake a distressed exchange offer or if it misses its next interest or principal payment." Lebanon's sovereign debt rating slid into junk territory long ago, but investor confidence has fallen further since a wave of protests erupted in October in a major challenge to the political establishment.
Prime Minister Hassan Diab met this week with a delegation from the International Monetary Fund to discuss how to tackle the country's spiraling economic crisis.
The Lebanese premier asked the Washington-based crisis lender for advice, but has yet to ask for financial assistance.
S&P said that may reflect the "political unwillingness to accept harsh adjustment policies such as exchange rate liberalization." Economists, investors and government officials are divided over what to do with the March bond payment.